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Friday, October 18, 2013

[Rant] Why upgrade your phone every two years?

The smartphones are essentially PCs. PCs become outdated pretty quickly. So are mobiles phones. But in most countries you have to enter a two year contract period when you buy a mobile phone. They will subsidize the price of the phone, but there is no such thing in reality. They will cover up the full price of the phone over the two year period.

Now in Japan, especially when it comes to the iPhone offered by Softbank, you essentially pay zero money up front. If you keep the phone for two years, you will not have to pay a dime “for the phone”. Like I said, they always make up for it by heavy monthly charges. So for example, the iPhone 5S which I recently bought costs about JPY6,700 per month. That’s for a 24 month period. The phone itself doesn’t cost a dime – if you settle for the lowest capacity (i.e. 16GB) model. But you are paying about JPY160,000 over the two year period. That’s a huge amount of money, especially when 3G was performing pathetically. With

There is another way you can buy the phone. You pay the whole price of it upfront, and that amount will be discounted from your monthly bill. In the end, you are paying the same amount of money. Basically, you will pay like JPY3,900 per month if you bought the phone paying upfront.

Let’s get to the real point of the article. If you didn’t upgrade to a new phone after two years, you will still have to pay the same monthly price. If you paid upfront, your monthly charge will increase to JPY6,700 after 24 months. Basically if you bought a new phone or not, you are going to pay the same amount of money every month. So why the heck wouldn’t you upgrade?

I cannot speak for other countries though. In other countries, the phone is not always free. Especially a high-end phone that just got released. The newest iPhone would cost $199 and above. For that scenario, maybe you don’t want to pay that amount every two years. But how much is your monthly bill? I’m sure it is close to $100. So paying $200 additionally every two years won’t go noticed.